Financial Accounting

Overview

The Financial Accounting exam covers skills and concepts that are generally taught in a first-semester undergraduate financial accounting course.

The exam contains approximately 75 questions to be answered in 90 minutes. Some of these are pretest questions that will not be scored. Any time test takers spend on tutorials or providing personal information is in addition to the actual testing time.

A four-function calculator is available during the exam as part of the testing software.

Knowledge and Skills Required

Questions on the Financial Accounting exam require test takers to demonstrate one or more of the following abilities:

Familiarity with accounting concepts and terminology

Preparation, use, and analysis of accounting data and financial reports issued for both internal and external purposes

Statement of Cash Flows (5%–10%)

Indirect method

Cash flow analysis

Operating, financing, and investing activities

Less than (5%) Miscellaneous

Investments

Contingent liabilities

Study Resources

Most textbooks used in first semester college-level financial accounting courses cover the topics in the outline given earlier, but the approaches to certain topics and the emphases given to them may differ. To prepare for the Financial Accounting exam, it is advisable to study one or more college textbooks, which can be found in most college bookstores. When selecting a textbook, check the table of contents against the knowledge and skills required for this test.

Textbooks

A survey conducted by CLEP found that the following textbooks are among those used by college faculty who teach the equivalent course. You might purchase one or more of these online or at your local college bookstore.

Online Resources

These resources, compiled by the CLEP test development committee and staff members, may help you study for your exam. However, none of these sources are designed specifically to provide preparation for a CLEP exam. The College Board has no control over their content and cannot vouch for accuracy.

Score Information

Credit-Granting Score for Financial Accounting

ACE Recommended Score*: 50
Semester Hours: 3

Each institution reserves the right to set its own credit-granting policy, which may differ from that of ACE. Contact your college as soon as possible to find out the score it requires to grant credit, the number of credit hours granted, and the course(s) that can be bypassed with a satisfactory score.

*The American Council on Education’s College Credit Recommendation Service (ACE CREDIT) has evaluated CLEP processes and procedures for developing, administering, and scoring the exams. The score listed above is equivalent to a grade of C in the corresponding course. The American Council on Education, the major coordinating body for all the nation’s higher education institutions, seeks to provide leadership and a unifying voice on key higher education issues and to influence public policy through advocacy, research, and program initiatives. Visit the ACE CREDIT website for more information.